While the individual mandate received the most attention while the Patient Protection and Affordable Care Act of 2010 was under Supreme Court review, the clauses making up the "employer mandate" are forcing employers to make difficult decisions about benefits.
To help with these complex decisions about offering coverage to employees, the New Jersey Hospital Association launched a new tool on Monday called RIPE – Reform Insurance Penalty Estimator – to help employers determine if they are at risk for penalties.
Under the law, by 2014, employers with more than 50 employees who do not offer insurance will face a penalty. Employers who do provide insurance but not meet federal requirements of affordability and "essential" coverage can also face penalties.
William Kennedy, senior vice president of health care business solutions for NJHA, said the tool is to help employers that provide insurance not be "blindsided by penalties." Kennedy was not available for further comment.
The tool uses simple spreadsheets to calculate if the employer is at risk for penalty, using employee salaries and benefits, as well as what the penalty would be. The tool also does a calculation for 2014 penalty possibilities, incorporating inflation.
According to Employers Association of New Jersey President John Sarno, employers at the very large and very small ends of the spectrum will be the ones making decisions about whether to offer insurance, and how to conform to federal requirements. Sarno said employers in the 50 to 250 employee range will be the most stable market because many intend to continue to provide insurance that is federally compliant as a way to compete for talent.
Employers with fewer than 50 workers will not be penalized for not offering health insurance, but if they choose to do so, will have to be federally compliant by 2014 or face penalties like larger employers.